Agency board member shielded by sovereign immunity

Sovereign immunity shielded a public agency board member from civil liability because they acted within the scope of their authority when criticizing the agency’s president, the Court of Appeals of Virginia has held in a published opinion.

The former president and CEO of the agency alleged that the board member tortiously interfered with his contract and retaliated against him. The circuit court found that the board member was immune from acts conducted within the authority expressly granted by statute.

Judge Clifford L. Athey Jr. agreed and said the statute plainly immunized the board member from  “‘any personal liability by reason of his carrying out any of the powers expressly given in this chapter,’ while they are ‘acting within the scope of their authority[.]’” (emphasis added)

“Hence, we cannot accept [the plaintiff’s] strained inference that [the defendant] was acting outside the scope of his authority as a board member[,]” the judge wrote.

Joined by Senior Judge Robert J. Humphreys and Judge Mary B. Malveaux, Athey affirmed the circuit court’s dismissal of Smith II v. Larrowe (VLW 025-7-340).

Attorneys for the parties did not respond to a request for comment.

Ongoing criticism

Due to his role as Botetourt County administrator, Gary Larrowe also served as a board member of the Roanoke Valley Broadband Authority, a public authority established under the Virginia Wireless Service Authorities Act.

The board hired Frank Marshall Smith II as the president and CEO of the RVBA. Smith and Larrowe eventually engaged in a dispute about the management fee the RVBA charged to Botetourt County. The fee dispute was eventually resolved.

However, Larrowe continued to criticize Smith to other board members and on the county’s website. Soon after complaining to the board about Larrowe’s conduct, Smith voluntarily resigned from the RVBA, claiming it was an intolerable workplace.

Smith then sued Larrowe in both his official and individual capacity, claiming tortious interference with his RVBA employment contract and unlawful retaliation under Virginia’s Fraud and Abuse Whistle Blower Protection Act.

Larrowe’s demurrer alleged that he could not as a matter of law have interfered with Smith’s RVBA employment contract, that Smith had not alleged any conduct which could be considered improper interference, and that Smith’s voluntary resignation precluded relief.

Further, Larrowe filed a plea in bar asserting sovereign immunity. Smith responded that Larrowe was not entitled to immunity when acting outside the scope of his authority. The circuit court sustained Larrowe’s demurrer and plea in bar. Smith appealed.

‘Expressly given’

Pursuant to the WSAA, no “member of any authority” or “persons acting in their behalf, while acting within the scope of their authority shall be subject to any personal liability by reason of his carrying out of any of the powers expressly given in this chapter.” (emphasis added)

“Thus, we look to the ‘expressly given’ powers set forth in the WSAA to determine what conduct is covered by the immunity provision,” Athey said, first noting the RVBA’s power to fix, charge and collect fair and reasonable fees, subject to periodic review and adjustment.

Additionally, the RVBA board may appoint a chief executive to carry out its orders and resolutions, as well as perform such duties as the board delegates.

“Thus, no RVBA board member can be ‘subject to any personal liability’ for ‘carrying out’ these specifically enumerated powers, so long as they are ‘acting within the scope of their authority,’” the judge explained.

“Importantly, the WSAA also provides that it ‘shall constitute full and complete authority for the doing of the acts herein authorized, and shall be liberally construed to effect the purposes of the chapter,’” he pointed out.

Plainly immunized

Rather than dispute whether Code § 15.2-5431.36 immunized RVBA board members from personal liability while acting within the scope of their authority, Smith contended that Larrowe acted outside the scope of his position while engaging in the alleged criticism.

Heeding the General Assembly’s directive that this statute be liberally construed, Athey found that it “altered the common-law rules pertaining to the sovereign immunity of government employees for certain individuals tasked with ‘carrying out any of the powers expressly given’ in the WSAA ‘while acting within the scope of their authority.’”

“By using the phrase ‘any personal liability,’ the General Assembly has granted those employees absolute personal immunity from suit,” Athey said.

“To the extent that the phrases ‘while acting within the scope of their authority’ and ‘by reason of his carrying out any of the powers expressly given’ are ambiguous, we must construe these provisions liberally,” the judge asserted.

Thus, the panel rejected Smith’s argument.

“The dispute between Larrowe and Smith arose because RVBA sought a ‘management fee’ from Botetourt County for the provision of broadband service,” Athey said.

“The alleged statements attributed to Larrowe in the complaint—including the internet post—related to Smith’s management of RVBA and that fee dispute with Botetourt County,” the judge noted.

Strained inference

While Smith specifically alleged that the county criticized the RVBA via Larrowe’s statements, he also averred that Larrowe’s membership on the board was due to his role as county administrator, the lead executive employee of the county.

“Although we would never encourage Larrowe’s actions, his allegedly tortious conduct occurred while Larrowe was conducting the business of the RVBA board, pursuant to his dual role as County Administrator of Botetourt County and board member of RVBA,” Athey wrote.

Therefore, the panel said it strained reason to infer that Larrowe was acting in a non-immune capacity when he engaged in the alleged actions that stemmed from the fee dispute between the RVBA and the county.

“The issues touched upon by Larrowe’s actions and conduct were germane to the work that RVBA, through its board members—including Larrowe—and appointed CEO—Smith—was expressly granted authority to conduct,” the judge pointed out.

Here, the issue was especially relevant to Larrowe’s position as a board member of RVBA appointed by Botetourt County to represent their interests.

“Moreover, the complaint alleges actions taken by an RVBA board member against a person who served at his pleasure, and there is no indication that any of the charged conduct related to a subject matter entirely outside the scope of RVBA’s expressly granted powers,” Athey said.

Unable to accept Smith’s “strained inference that Larrowe was acting outside the scope of his authority as a board member of RVBA,” the panel held that his conduct was undertaken by virtue of his membership on the board of RVBA through his role as county administrator.

“As a result, Larrowe could not be subject to ‘any personal liability by reason of his carrying out any of the powers expressly’ vested in him and the RVBA by the WSAA,” Athey said.

“The fact that Larrowe used charged and contentious language in his discussions with Smith and his fellow board members is unfortunate, but the language of Code § 15.2-5431.36 immunizing Larrowe cuts sharply against Smith’s assertion that Larrowe’s conduct was ultra vires,” the judge opined.

Having found that Smith’s pleadings established the sovereign immunity which protected Larrowe, Athey commented that “it is up to the General Assembly to remove or limit the immunization of RVBA board members under Code § 15.2-5431.36.”